ATLANTA (Reuters) - The U.S. Army Corps of Engineers proposed on Thursday reducing the flow of water from Georgia rivers into Alabama and Florida in a bid to resolve a tussle among the three states over water use during a drought.

The states will also work on a fresh plan for the corps on how to respond to the drought, U.S. Interior Secretary Dirk Kempthorne told a news conference that followed a meeting of the governors of the three southeastern states.

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"This is the best opportunity for us to find a solution with regard to water and its allocation," Kempthorne said.

"It's no longer theory. There is a drought in the South. It is also important to recognize that the solution can and will come from the governors," he told a Washington news conference relayed via telephone.

The region's worst drought in decades has prompted a water war among the three states. Georgia Gov. Sonny Perdue has filed a lawsuit to force the corps to reduce the amount of water it releases each day from Lake Lanier, 45 miles north of Atlanta.

The Washington meeting was the first opportunity for all three states to discuss the issue after weeks of acrimony and all three welcomed the plan, which they said was not enough of a reduction to hurt downstream activity.

The corps proposed a slow reduction in the minimum amount of water flowing through southwestern Georgia's Woodruff Dam from 5,000 cubic feet per second (141 cubic meters per second) to 4,200 cubic feet per second, said Lt. Gen. Robert Van Antwerp, chief of the corps.

"What we need is extraordinary ability to operate in this time of drought," Antwerp said.

The precise extent of the reduction will be determined after consultation with other government organizations, said a senior corps official.

Alabama Gov. Bob Riley said later all three governors had agreed to resolve their dispute by February 15, 2008.

WORRY ABOUT FISHERIES, POWER

Florida Gov. Charlie Crist had previously said he strongly opposed reducing the flow, in part because it would threaten fisheries in Florida's northwestern Panhandle region.

Riley has also opposed cutting the flow, arguing it could inhibit cooling at the Farley nuclear plant in southeastern Alabama that serves homes in all three states.

In an apparent reassertion of the dispute, Riley said the corps had given the Atlanta-area water authority 10 days to explain how it will comply with rules on water withdrawals.

The corps agreed with Alabama at the meeting that the Cobb County-Marietta Water Authority, north of Atlanta, was exceeding allowed withdrawals by 100 percent, he said later.

"Those excessive withdrawals have taken place at the same time the corps has reduced the flow of water into Alabama," he said in a statement.

The three governors would work on writing an addendum to the corps manual with operating details for the plan before a meeting in Tallahassee, Florida's state capital, on December 12.

Lanier feeds not only Atlanta, the region's largest city, but also a watershed system that serves towns, industries and power plants in other parts of Georgia, Alabama and Florida.

Experts argue that the three states have long lacked a coherent plan for water management in the face of rapid population growth in the Atlanta area, which stands at the head of the watershed system.